Bonds

□ Bonds are equity securities issued for financing by countries, local governments, listed and private companies, which are relatively stable investment tools. Bonds are generally regarded as a long-term investment up to a period of 30 years, but usually are 5 to 10 years. As the commitment of interest payments on the issued bonds is contract-bound, bond issuers have an obligation to deliver interests or principal to the bond holders on the interest release dates or the maturity date of the bonds, regardless of the financial status.

□ Bonds can be classified into government bonds, financial bonds and debentures depending on their issuers.

□ Bond yield is determined by several major factors, including coupon rate, maturity date denomination and the purchase price of the bond.

□ When an interest rate goes up, the price of the bond falls. On the contrary, when an interest rate goes down, the price of the bond rises.

Investment involves risks. The price of bonds can and does fluctuate and any individual bond may experience upward or downward movements, and may even become valueless. There is an inherent risk that losses may be incurred rather than profit made as a result of buying and selling bonds. The holder of bonds bears the credit risk of the issuer and has no recourse to Delta Asia Securities Limited (Hong Kong) / Banco Delta Asia S. A. (Macao) unless the latter is the issuer itself.